Impact of land quota and land supply structure on China's housing prices: Quasi-natural experiment based on land quota policy adjustment

摘要

From 2003 to 2019, housing prices in China jumped by 295%. Much of this growth can be attributed to the spatial and structural misallocation of land supply. Specifically, China's government determines the urban land supply, using land quotas to allow for greater land supply in the country's central and western regions, but less so in the eastern region. In addition, the government controls the land supply structure, whereby industrial lands take up a larger proportion than commercial and residential lands. This paper attempts to investigate how China's land quota system and land supply structure impact the country's housing prices. After setting up a theoretical framework, we construct a panel data set including land quota, land supply structure and housing prices for 282 prefecture-level cities from 2001 to 2016. We demonstrate that housing price growth in cities whose land quotas were lowered during the study period is about 10% higher than that in cities whose land quotas were raised, with the former being mostly big cities and coastal cities. We further find that land supply structure affects housing prices, whereby the lower the proportion of commercial and residential land supply, the higher the housing prices. We further find that land quotas and land supply structure have a mediating effect on housing prices through land prices.